Hedonic Adaptation
Why our lives are an endless loop of wastefulness and indulgence
So this is another “fundamentals concepts of pragmatic life” kind of post, just like the earlier post on value. This concept will be frequently referenced throughout many of the future posts on this blog, and was a concept that, when I learned about it, completely changed all my views on life.
The concept of hedonic adaptation essentially says that as you make more money, your spending, expectations, and desires increase at the same rate, resulting in no actual gain in happiness. For example, if you are living on $10/day and have for a while, you have a relatively stable level of happiness. You have figured out how to survive, and this is your normal life. Of course, you want more, and it would be just great to have more money to live on, but you are not miserable. And someone else living on $1000/day actually has the same average level of happiness, and wants more money and more things just as much as the person living on 1/100 of the resources.
This is hard to imagine at first. If you think about living on much less than you have, you imagine how uncomfortable and miserable you would be, and if you imagine living on much more than you have, you imagine how luxurious and incredible life would be. When you see people living on less, you feel bad, and when you see people living on more, you feel jealous. But the fact is, everyone thinks this same way, no matter how rich or poor they are. If you suddenly had more money, you would spend more and get a dopamine spike for a little bit as you feel luxurious and adjust to the new lifestyle. But soon after, your happiness would settle down and average out to the same level as before. This will simply just be your new normal life. You’ll imagine being miserable at your previous income level, and still lust after those who make even more. And vice versa if suddenly your resources drop. There’s a reason it’s also called the “hedonic treadmill” — its an endless and pointless reward loop.
Nothing can stop us from feeling the pull of hedonic adaptation — we’re simply hard wired to feel this way, it’s part of our evolutionary history. But if we know about it, we can easily fight against it. The best way to fight against the urge is to downsize your lifestyle bit by bit until you feel like you are at a certain point where you are healthy and comfortable, then simply save and invest anything extra that you make and keep the exact same lifestyle, instead of spending more simply since you have more, which is our default tendency.
Whittling your lifestyle into something that’s “not excessive, but is healthy and comfortable” is a very vague point, I understand this. We’ll be digging deep into this concept in a very pragmatic way, frequently based solidly on math and numbers, through a number of posts in the future.
The “saving the rest” part is where things get interesting. Assuming you follow the standard path of getter better at whatever your work is and therefore making more money from it over time, we’re talking about starting to contribute rather large chunks into your savings over time. This can easily get to 50% or higher of what you make if you are frugal and dedicated. But what to do with these savings? There are many options, and different people vary greatly in which paths they choose. My primary goals at this point in my life are using any extra resources I accumulate to invest in learning new things, and to give back to those in need. I will also be writing about both of these goals, how I settled on them, and how I plan to accomplish them quite extensively in the future.
The concept that having and spending more money will not make you happier, and the concept of settling on a solid, healthy, and inexpensive lifestyle are central tenants of the thinking that will come from this blog. I’d encourage you to take some time to mull these concepts over and figure out what they mean to you. And of course, to subscribe to this blog so you can see the results of my analysis and share your views with me and the rest of the readers as well!
Photo is of the Martinez Hotel in Cannes. You can book a room for two at this hotel for $1000/night. We stayed in a tiny room in an apartment about a half hour from Cannes’ center with a lovely AirBnb host for $40/night, and we had an incredible time there.
